Imagine not being able to buy one day’s groceries with your monthly salary – this is the reality for people in Venezuela. Inflation, low wages, and economic instability in developing countries push citizens to look for solutions. Cryptocurrencies could support economic growth and increase access to financial services.
Everyone with an internet connection can open a crypto wallet to receive and send funds, make daily transactions. That way digital assets can help achieve financial inclusion and become an alternative to bank accounts in poorer countries.
Overseas remittances are often crucial for the economy of developing countries. Blockchain technology has either very low transaction fees or no fees at all and can offer effective ways to transfer money and exchange currencies. Also, there are no third-party interventions and money can be transferred within seconds.
In an exclusive interview with DailyCoin, the founder of crypto accountancy and consultancy firm My Crypto Tax, Shukry Haleemdeen explained the main crypto-related issues for migrants and people from poorer nations.
Some advantages of using crypto are the easier and quicker transfer of funds; users can have more control and people don’t have to go through independent vendors or third-party organizations.
However, in some countries when people want to take money out, they need to have access to banks so if a country doesn’t have the facility, that’s going to create a problem. Unless they can spend crypto in the country, Haleemdeen explained.
“To make crypto really functional, the infrastructure globally has to improve, because especially in third-world countries crypto isn’t very much welcomed. So even if people have crypto access, transfers and cashing out crypto is going to be an issue.”
The main concern in developing countries is that their financial sectors are not yet sufficiently advanced. Such countries are still two steps behind in the sector compared to Western countries. Until systems are developed, prevailing crypto acceptance will be restricted.
“Few people might use crypto, but a widespread day-to-day use of digital money will take time and we’re not there yet,”